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  • #73414
    GailD
    Flatchatter

      Good morning, firstly I very new to strata living and I’ve only done it for three months, my first AGM is coming up and I just have a couple of questions. I hope I word this right but please excuse me if I don’t

      1. What is considered a reasonable increase in fees? From the strata report I purchased before buying into the units there is 54 lots and 34 units. There are no extra facilities like pool, gym or anything like that.

      [There was a second part to this post which I have split off to HERE – JT]

      • This topic was modified 3 weeks, 6 days ago by .
    Viewing 13 replies - 1 through 13 (of 13 total)
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    • #73421
      Jimmy-T
      Keymaster

        1. What is considered a reasonable increase in fees?

        The real question is, what is a reasonable increase in spending, which is what determines the levies.  If the OC is suddenly having to come up with money for neglected maintenance, for instance, that would be a valid reason for an increase that might seem unreasonable if you have budgetted for less.  Excessive amounts being paid to lawyers to pursue pointless cases at the tribunal would not be reasonable – but would still be enforceable. Increasing by the level of CPI is a good guide but there are so many moving parts in strata it would be hard to pin it down to that.

        If there is an increase in excess of the CPI, your strata treasurer or strata manager should explain it in the notes accompanying the AGM agenda.

         

        The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
        • This reply was modified 4 weeks ago by .
        #73430
        GailD
        Flatchatter
        Chat-starter

          Thank you for your reply, that I can see the only large increase is the budget for gardens has doubled.
          There is no mention of any solicitor fees for cases.

          I just can’t see anything that would justify the increase.

          There is no big maintenance issues being forecast.

          Its roughly a 40% increase in the yearly fee.

          thanks again for the reply, I will continue reading and learning

          #73433
          Jimmy-T
          Keymaster

            Perhaps the increase is in the contribution to the capital works (sinking) fund in anticipation of future works.  Send your treasurer or strata manager a polite note asking for more information.

            The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
            #73436
            GailD
            Flatchatter
            Chat-starter

              Thank you, I will do that.

              #73440
              Sir Humphrey
              Strataguru

                Perhaps there has been a change of gardening contractor or some substantial work planned for the coming year. If I were the treasurer, I would have accompanied the proposed budget in the meeting papers with a short statement that ‘1) most expenses carry on much the same as the previous year with only small adjustments, and 2) the only substantial change is a doubling of the garden budget because …’

                #73441
                GailD
                Flatchatter
                Chat-starter

                  I have read the report over and over and yes the gardening budget is one area that has increased, its more then doubled. Insurance has increased slightly but nothing over the top.
                  I have emailed the strata managers for clarification on why there is a huge increase.
                  Hopefully they may shed some light on this.

                  #73453
                  GailD
                  Flatchatter
                  Chat-starter

                    The strata managers have answered my email, they have engaged a property consultant to look at future expenses for the upkeep of the property over the next 15 years and that’s part of the increase. I will carefully review that before the AGM.

                    The second part of the increase is maintain gardens, there really is very little gardens to maintain and they have increased the budget from $11k to 25k… I don’t think this is needed.
                    The third increase is an additional allowance for the insurance premium to be paid, this is another one that I will look at.
                    Thanks again for the help.

                    #73459
                    Sir Humphrey
                    Strataguru

                      Strata insurance, and insurance more generally, have been increasing well above CPI for the last few years. Climate change has reached the suburban hip pocket.

                      #73472
                      kaindub
                      Flatchatter

                        GailD

                        to understand where the money is spent you do need to examine the accounts.

                        Ive been a treasurer of a number of strata, and get lots of “ advice “ from owners that this or that expense is too high. I ask these owners to find cheaper services, which inevitably they decline to do.

                        It takes a lot of time to send out requests for tender, receive them and then examine them. Most strata managers and committees don’t have the time to do this.

                        The other item you need to look at is the capital works fund. Maybe the strata manager or the committee considered the fund to be under capitalised and decided to have catch up levies.

                         

                        #73476
                        GailD
                        Flatchatter
                        Chat-starter

                          I do actually think that’s what has happened, I think the report they received has found a few problems that will need attention and it seems to forward forecast 15 years.
                          I can manage the increase but I know I have neighbours that pretty much live fortnight to fortnight and this has to be hard for them.
                          My intention is to question the increase in gardening fees and if it’s justified I will be ok with it.
                          I’m trying to read and learn as much as I can about strata living because I do like living in this block of townhouses.
                          thank you for your reply, I’m grateful for the help.

                          #73584
                          peter_mcc
                          Flatchatter

                            The second part of the increase is maintain gardens, there really is very little gardens to maintain and they have increased the budget from $11k to 25k…

                            If there are 34 units that means gardening has gone from $323/year per unit to $735/year per unit (assuming an equal split which probably isn’t the case). That alone isn’t a big change.

                            The budget should show last year actual, this year actual and next year budget – if you compare the columns it should be possible to see if there are any big increases.

                            #73675
                            GailD
                            Flatchatter
                            Chat-starter

                              Just a quick outcome followup

                              I went to the AGM and after hearing the allocation of extra dollars I was satisfied with the increase. There was a discussion regarding the garden increase but everyone agreed to decrease this by $5000 and although that’s not a huge decrease it showed that it’s a democracy and everything was open for discussion, the only other big increase was insurance and I think all insurance costs have increased.
                              I only moved in December and from what I see there is a little bit of stuck in the past with a lot of owners. I don’t think the fees have kept up with inflation and this had to happen.
                              All in all I am happy with the outcome.

                              #73683
                              Quirky
                              Flatchatter

                                I found this guide:-

                                How are strata fees calculated?

                                As a guide, expect to pay between 0.3 per cent to 1.2 per cent of a property’s value in strata fees. Those with more amenities will be in the upper end of this range.

                                Always do your homework on strata fees by looking at what is being charged by comparable buildings. Low levies can correlate with poor maintenance. This can not only be expensive to fix but can impact the long-term value of your property.
                                [ https://www.ljhooker.com.au/blog/ultimate-guide-strata-fees ]

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